SCHULZ: William Buckley once said "I would rather be governed by the first 2000 names in the Boston phone book than by the Harvard faculty." Do you disagree? Why?

CAPLAN: I'd definitely rather be governed by the members of the American Economic Association - or even a random sample of college graduates - than by the first 2000 names in the Boston phone book. The problem with the faculty of Harvard is that it's highly educated (a predictor of more reasonable views in general), but also highly self-selected for leftist ideology (a predictor of very unreasonable views about markets). So would the Harvard faculty be better or worse than what we've got? It could go either way.

Bryan also improves on one of his classic examples.

suppose a mad scientist wants to give you an unnatural operation. Which would you prefer? A selfish mad scientist who refuses to operate unless you pay him - or an unselfish mad scientist who ties you down on the operating table and says "You'll thank me later - and your gratitude will be payment enough"?

His point is that irrational voters are like the unselfish mad scientist, who is even more dangerous than a rational mad scientist.

Read the whole thing. I know we are bombarding you with plugs for Bryan's book, but his thesis is pretty unusual and important, eh?

I read a book by an investment research group, called Our Brave New World, which posits a similar problem exists in the investing world. It's that the drive to minimize risk and optimize returns by index investing will lead to lower returns overall. Basically, it leads to the details of companies being ignored and decisions being made based on size and minimizing transaction costs.

Recent college graduates are too wet behind the ears. The members of the American Economic Association should be seriously listened to---but cannot be allowed to become our benevolent dictators. No, when everything is said and done the system is best served by encouraging everyone possessing a modest education and better to take seriously their political sector duties. Literacy tests are of great value. Marginal to functionally illiterate people should be prevented from voting! But we must also be wary of the numerous idiots graduating from Harvard Universities and our other “elite” schools. The fools often want to be “hip and with it” and thus inevitably cause enormous destruction.

The Democratic Party remains a great threat to the future of the United States. Its educational elites are usually liberal whack jobs that rely on our most ignorant citizens to help them win elections. Republicans are not perfect, but they are ultimately our only realistic hope.

I'm surprised that Bryan Caplan can't think of what may be behind the "pessimistic bias." How about the media? Bad news sells. Lou Dobbs brays that "everything stinks" because he's found that it's lucrative. Elsewhere in the media, Paul Krugman brays that "everything stinks" to . . . um . . . ingratiate himself with the NY and SF Chardonnay & Brie set? Then there's the professional politicians--Edwards, Nader, etc.; the entertainment crowd. C'mom!

I can't understand Bryan's irrational faith in intellectuals. Sure he would rather be ruled by the current members of the AEA, but can he guarantee that his views will always match those of the AEA. What's to prevent them all becoming socialist in the future? And just because he agrees with them on economics, what expertise do they have in foreign policy, police work or other areas that governments handle?

Remember, intellectuals have given us eugenics, Hitler, socialism and communism. Most intellectuals are socialists of one variety or another. Many are communists.

I disagree with Bryan that voters are irrational. Unless they have a physical brain problem, human beings can't act irrationally. They may appear to act irrational when they don't possess the same knowledge that we do, but based on their knowledge, people always act rationally. The real problem of democracy is to educate the voters well enough.

I completely agree with Fundamentalist. Members of the AEA are experts in exactly the one area where Bryan thinks the government should not interfere: the economy. The only good their expertise can do is to restrain them from doing anything -- not a bad thing in itself, but how long before they get bored and turn socialists?

Based on my experience of Cornell University, I'd rather be governed by a random selection of names from any telephone book -- as long as it's not from a college town.

Fundamentalist, not having access to information is known as being "ignorant". Theories of "rational ignorance" were common before Caplan, but were believed to be harmless to democracy due to the "miracle of aggregation". Caplan discusses the difference between rational ignorance and irrationality in Rational Ignorance vs Rational Irrationality. If you haven't read that paper, do so before commenting.

I agree with you that the AEA would likely turn into something quite different from what it is now if it were a governing body. I would also note that Caplan analogized his Council of Economists to the Supreme Court rather than a dictator, vetoing laws that are "uneconomical" rather than "unconstitutional". I am not sure how I feel about that, but I am also not sure how I feel about the Supreme Court. Intellectuals have come out for really bad ideas, but movements like Nazism and Communism were also quite populist. All surveys show that the more educated tend to have more laissez faire views, as the people who remain at universities are not representative of all those who graduated from those universities.

TGGP, I read Bryan's "Rational Ignorance vs Rational Irrationality" and found some merit in it. However, I object to the confusion his term "rational irrationality" causes. It's an oxymoron. He thinks that people go against their better judgment and knowledge because the pay-off is better in the short run. He has to come to that conclusion because he's trying to explain behavior in purely economic terms. You might say that by such an attempt Bryan is being "rationally irrational."

Public Relations research does a much better job of explaining why people behave the way they do. For one, PR research shows that most people don't care about the truth, they choose what they want to be true for emotional reasons first, then they search for a rationale for that decision, and just about any position on any subject can be rationalized. For another, some people don't trust themselves to decide important issue, so they rely on authorities to tell them what to do. Finally, the facts are often clear in hindsight, but usually in dispute and sparce at the time decisions must be made.

Why do the majority of university professors continue to support socialism after a century of its failure being demonstrated? Probably, as Thomas Sowell points out in his book A Conflict of Visions, it's because they place a greater value on something other than economic success, which is what they perceive as the moral superiority of socialism. That's why intelligent people like Danny Glover and Michael Moore can love Castor and Chavez. They can see the poverty of both countries; they don't care. They value the equality of poverty more.

Bryan should pay more attention to marginal utility theory, because just as prices are determined by subjective valuation, so are decisions in science, religion and politics. What may seem irrational to Bryan may be nothing more than a difference in value systems.

Fundamentalist, are you sure you read the paper? Because it doesn't sound like you did. "Rational irrationality" is not an oxymoron. The first word in the phrase refers to the meta-rationality of that behavior in terms of the utility they derive from holding certain beliefs. The second word in the phrase refers to them not behaving like Bayesians because of those "preferences over beliefs". What do you mean by "purely economic terms"? Ever since Gary Becker "economic imperialism" has been used to examine all sorts of behavior. Utility theory can accommodate all sorts of things that might not have previously been considered part of "economics". You will also have to elaborate why you think Bryan is being "rationally irrational".

Your point about Public Relations does not seem at all at odds with what Caplan says. It actually seems to support it.

Do the majority of university professors actually support socialism? You will have to cite some poll numbers. I would agree that pretty much the only places you can find doctrinaire believers in Marxism these days in the First World are on campuses. Most people don't know what Marxism, liberalism, conservatism, libertarianism and so on actually mean (see Philip Converse). There are a lot of "folk marxists" or "folk socialists" among the uneducated though, which we usually refer to as "populists".

Caplan has already answered the objection that it's all just opinion so discussion of "irrationality" has no place. He establishes that people have systematically biased beliefs about objective facts (like budgets and economic statistics). He shows that people claim they would support other policies if they believed different things about such objective facts (for example, minimum wage and unemployment). He came up with his "enlightened public" to represent people who have the same circumstances and ideology as the general public but were more knowledgeable to meet that sort of objection. They think like economists.

TGGP, I can't cite any surveys on university professors regarding socialism, but several surveys show that something like 80% are Democrats, the socialist party. (Demos are socialists, Repubs are socialist-lite). Also, I constantly read articles by socialists who use the fact that more than 3/4 of university professors are socialist as evidence that socialists are smarter than conservatives. But here's an interesting quotation from Hayek's The Fatal Conceit (1988):

Indeed, the basic point of my argument - that morals, inlcuding, especially, our institutions of property, freedom and justice, are not a creation of man's reason but a distinct second endowment conferred on him by cultural evolution -runs counter to the main intellectual outlook of the twentieth century. The influence of rationalism has indeed been so profound and pervasive that, in general, the more intelligent an educated person is, the more likely he or she now is not only to be a rationalist, but also to hold socialist views (regardless of whether he or she is sufficiently doctrinal to attach to his or her views any label, including 'socialist'). The higher we climb up the ladder of intelligence, the more we talk with intellectuals, the more likely we are to encounter socialist convictions. Rationalists tend to be intelligent and intellectual; and intellegent intellectuals tend to be socialists.

...I suppose that I can claim to speak with some experience about this outlook because these rationalist views that I have been systematically examining and criticising now for so many years are those on which I, in common with most non-religious European thinkers of my generation, formed my own outlook in the early part of this century. At the time they appeared self-evident, and following them seemed the way to escape pernicious superstitions of all sorts. Having myself spent some time in struggling free from thos notions - indeed, discovering in the process that they themselves are superstitions - I can hardly intend personally some of my rather hars remarks...

One's initial surprise at finding that intelligent people tend to be socialists diminishes when one realises that, of course, intelligent people will tend to overvalue intelligence, and to suppose that we must owe all the advantages and opportunities that our civilisation offers to deliberate design rather than to following traditional rules, and likewise to suppose that we can, by exercising our reason, eliminate any remaining undesired features by still more intelligent reflection...

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